Ukraine, the fashion industry to send an SOS

The war in Ukraine scares the Made in Italy fashion industry. Not only because of the current blockade of products export to Russia (with a value of 1.4 billion euros), but also because of the productive sourcing. MFF asked representatives of the textile-clothing, leather goods and footwear sectors to do an analysis. Precisely the latter sector is causing the most concern, since the situation could put districts such as those in the Marche in serious difficulty. Russia and Ukraine, respectively the 10th and 26th outlet markets in terms of footwear, are indeed areas to which Italy exported a total of about 317 million euros in 2021 and in which exports were slowly reaching (with +9.3% on 2020) pre-Covid-19 levels (in 2019 exports amounted to 346.4 million euros).

"After the pandemic, the increase costs in raw materials and energy, the war has started and I do not know what else we can expect," Siro Badon, President of Assocalzaturifici, the association representing Italian shoemakers, explained to MFF and added that "the districts in the Marche have undoubtedly the most serious problem, with some companies having 90% of their business in Russia". The entrepreneur explained that "shipments are currently blocked also due to the closed air spaces. Therefore, it will certainly not be easy to deliver goods and in any case the decline of the Russian rouble will lead to an inevitable request for discounts".

On the textile-clothing front, after having exceeded one billion euros in 2018, Made in Italy exports to Russia suffered a drop of 17% in 2020, but from January to November 2021 saw a recovery of 14.6%, reaching 870 million euros (-4.1% on the same period in 2019), 770 million euros of which stemmed from clothing. Sergio Tamborini, President of Sistema Moda Italia (SMI), talking about the sector, explained that "there are three elements of risk related to the ongoing conflict, the first represented by the market, with sanctions such as the blocking of SWIFT payments, generating a series of difficulties. Another topic of tension is that of energy retaliation by Russia, causing problems for upstream activities in the supply chain such as fabric producers, for example. The third element concerns the relocation of some textile companies with a high level of production know-how to areas adjacent to the conflict such as Moldova, Romania and Poland, regions that could be impacted if the scope of the crisis were to widen".

Among other things, SMI and Assocalzaturifici, together with the trade unions FEMCA-CISL, Filctem-CGIL and UILTEC-UIL, have recently asked for an urgent meeting with the Minister of Labour Andrea Orlando in order to obtain immediate measures such as an extraordinary social safety system (based on the model of the Covid-19 redundancy fund) in favour of the companies that are suffering the effects of the conflict (see MFF of March 12). Moving on to leather goods —with exports to Russia in the first eleven months of 2021 exceeding 95 million euros (+44% on 2020, +17% on 2019)— while sharing a strong concern about the international scenario, Franco Gabbrielli, President of Assopellettieri, made a distinction between companies with their own brands and contractors for designer labels: "The subcontractors have several work orders that are the result of the post-pandemic restart. Independent brands have the greatest difficulties, since Russia was considered the lifeline to make up for the problems in areas such as Japan and Korea, which are still closed due to the Covid-19 emergency. Now that these three markets are struggling, everything is played out in Europe and Italy". (All rights reserved)